PLM and Open Standards: Money Talks?

PLM and Open Standards: Money Talks?

I’m keeping my eyes open for everything that happens in the space associated with open source and open standards. Open standards are not well developed in engineering and manufacturing space. In my view, CAD / PLM mind share vendors are not on the leading edge of open standard development. I can see multiple reasons to that – traditional orientation on proprietary data, strong competition, IP protection and what is mostly important – business strategy oriented on locking customers on the particular software with strong emphasizing of recurrent revenues coming from upgrades, renewals and next versions.

The following article caught my attention – “UK Government Defines Open Standards as Royalty Free”. It made me think that open source and open standard can have more momentum ahead.

New procurement guidance from the UK government has defined open standards as having “intellectual property made irrevocably available on a royalty free basis”. The document, which has been published by the Cabinet Office, applies to all government departments and says that, when purchasing software, technology infrastructure, security or other goods and services, departments should “wherever possible deploy open standards”.

My perspective on Open and Free was always from the standpoint of marketing practice. Open Source, Freemium Business models – these are examples I mentioned in my blog before as something that may have a significant potential in the future. Companies may develop their own understanding of “open” and “open standards”. It is interesting to see the future trajectory of JT as an open standard. Aras PLM is an example of vendor that developing their position in the market as “enterprise open source”. Will “enterprise open source” develops a different notion of “open source”? How “enterprise open source” will correspond to the notion of “intellectual property made irrevocably available on a royalty free basis” – a good question to ask. I’m going to ask these questions on my Beyond PLM panel during Aras Community Event in April 2011 in Dearborn, MI.

What is my conclusion? In my view Open has a future. “Proprietary” and “customer locking” will be diminished within the time. However, to move between these two polar points takes time and significant amounts of turbulence. Existing vendors, legacy software, business models – cost of change is significant. But cost of saving will be huge on the side of manufacturing and consumers. In my view, companies will need to take the leapfrog in order to compete in a different way.

Best, Oleg
Freebie. (irrevocably available)

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  • Hakan Karden

    Hi again Oleg,
    thanks for your continued interest in Open Standards!

    Look at the cost of a big project in aero/defense as an example. There are investments in HW, SW and Data. The investment in data is many thousands on engineers working many thousands of hours on the project. It starts with the systems engineeing phase trade off analysis, requirements etc and this goes on into modeling, simulation, design, manufacturing, product support, modification and decomissioning. 40-50 years with millions of engineering hours in the extended/virual enterprise. The focus 20 years ago was on HW, 10 years and still it is SW but since some years ago there is more and more understanding (not just with the standards people) that the real asset that needs to be managened is data/information.

    So, in many ways Open Source is much less critical than Open Data.
    STEP, PLCS, AP233, 203/214/242 is the answer to many if the key problems.
    I think users are prepared to pay for good SW code and upgrade and maintenance. This is critical to their success. But they are increasingly interested also in investing in Open Data – so they can operate in an agile way without being locked in by SW vendors. This is extremely critical for future competition – we need to minimize waste in PLM supported projects over the life cycle of a project. Allowing best of breed tools.

    As said before, the pull needs to come from users that are aware of this, backed up and educated by people like yourself, the analysts like Gartner, CIMdata, CPDA etc. So they need to look at more than just who are the big ones today (= money talks) and they are starting to do that. The big PLM vendors will not push for Openess. We need to collaborate in a community that is committed to the success of Open Standards for Product Data – this is a Game Changer! For the benefit of users.

    Håkan
    CEO Eurostep Group

  • Awadhesh Singh Parihar

    Very interesting observation from Mr. Karden! If I can take the liberty to extend those observations, openness in PLM context should not just be limited to technology and data, but also the business processes and the way they are implemented. Engineering data, as it exists in Legacy applications today, is a result of the way business processes are being carried out and gets intertwined with product definition data (there by locking)

    So, in order to have a sustainable arguement around open PLM, my thinking is – Open standards will need to be developed around product processes, from product’s cradle to grave. In the current state of PDM Schema, PLM Services or DEX standards, focus is interoperability and not ‘operability’ itself.

    If a truly Open PLM package has to be conceptualized – it will need to have state and events (workflows), actors and product defintion data confirming to some standards. It wouldn’t mean ‘prescribing’ the business processes to the companies, but developing an academic superset of the way various industries carry out the product defintion, engineering processes.

    Regards
    Awadhesh

  • Jens Krueger

    Hello Awadhesh,
    I would also agree with Hakan on product data as the main asset. To me this also means that process comes later. I do see a need for high-level standardization of processes for inter-company processes like collaborative engineering change and project management. I could also see this need in order to provide some context / semantics to the product data. But for the larger part, I would consider processes as something that is company-specific and potentially a competitive differentiator. Processes are also subject to continuous improvement, i.e. they change frequently and are hard to standardize.
    Best regards,
    Jens

  • beyondplm

    Hakan, thanks for the insight. I cannot agree more. Data is more important than software/tools. However, money talks – companies need to buy tools to make a job done. As you mentioned (and I agree too), companies are not interested to pursue Open Standards. This is not cost-effective. So, I can see government regulation like UK as a possible turning point. Best, Oleg

  • beyondplm

    Awadhesh, I agree- processes need to be included. At the same time, when you increase the volume of things people need to agree about, it becomes a very complicated story. The simplicity always wins. So, the simplicity and granularity need to be an answer. Just my thoughts… Best,Oleg

  • beyondplm

    Jens, my take is that top down standardization as it exists in today’s enterprises is VERY expensive. As much people and processes you pull in, the less effective it going to be. Just my opinion. Thanks, for the comments. Best, Oleg

  • Mattias Johansson

    Looking at the PLM marketplace it is understandable that vendor lock-in is a common approach for today’s vendors and it is most likely a heritage of culture from the good old CAD days. When it comes to Product Data, as Håkan says, here lies a huge investment. Not in license money but in creation of an intellectual asset.

    The key enabler for Open Product data is decoupling of the information from the process that generated it. Here we should really emphasize that one should differ between representation and manipulation/creation (more on this later in the comment…)
    As Awadhesh states, today’s PLM systems are not storing/representing the information in such a way that it can be independently interpreted without the software and its built it (often hardcoded) process.

    The standards mentioned are not the sole savior and solution to this situation but can very well form a the foundation (even though transaction oriented) since they are designed to represent product information independent of process.

    Does decoupling of information from creating process mean that vendor excellence is no longer something important, that open information is a threat to the PLM system community? No. It will even further allow PLM vendors to excel in being the best and this will have to be their selling strategy. Being best in helping the customer to use the best process, be able to apply agility to its company ecosystem and use best of breed by providing the best manipulation and creation tools is where the selling point should be made.

    In an agile business environment where extended/virtual enterprises are part of daily busienss this decoupling and the use of standards are becoming the way forward and where the one-system approach cannot survive.

    Regards,
    Mattias
    CEO Eurostep Sweden

  • Hakan Karden

    Thanks Jens,
    this is the way STEP and PLCS are designed. To scope the information model an activity modell is used – but the key is to standardize the information model. Processes and Technolgy (IS/IT) need to develop and change over time – this is the competitive stuff. This becomes obvious in the Extended/Virtual Enterprise – you cannot demand all partners to align and agree on everything. This will decrease your agility. It will drive cost and add time – so agree with Oleg that top down – the same for everyone – is not the way forward.

    What needs to be agreed are overall processes such as Engineering Change across enterprises. We have been using a VDA standard for this in some projects with Share-A-space.

    STEP and PLCS are good technologies to actually start questioning PLM as implemented today. They provide a reason to go back and rethink things and start looking more at business needs than what is being offered by the traditional PLM leaders and SI:s. This is why STEP and PLCS is high on the agenda for many these days. Traditional PLM is not delivering what was promised. Users are experiencing this pain.

    Regards,
    Håkan
    CEO Eurostep Group

  • Hakan Karden

    Oleg,
    Agree government regulations could help. PLCS is in this position with several MODs in the world asking for data in PLCS format. However, the really cool thing is that PLCS and STEP AP233 (they are designed interoperable) are extremely good information models – the best there are. This is the reason why also non aerospace/defense organizations are looking at it/using it.
    In customer projects we can (out of the box) do things that require a lot of tricky customization in the classic PLM tools. This, in combination with the fact this is standards based makes it very powerful.

    This understanding what can be done is better in Europe than elsewhere – I have my view why this is so.

    Regards,
    Håkan
    CEO Eurostep Group

  • beyondplm

    Mattias, Thanks for your comments and insight! I believe that a combination of vendor excellence in process tools with Open Data can be a best strategy to go these days. Best, Oleg

  • beyondplm

    Hakan, with all respect to STEP/PLCS achievements (this is probably the best standard-oriented project that succeeded), I think it will solve only part of problems PLM vendors are suffering today – increase openness. However, manufacturing shops are so different these days. The combination of openness and flexibility is what required. Unfortunately, what I observe is that STEP/PLSC support is actually a feature that in most cases delivered as “add-on” by request. Best, Oleg

  • beyondplm

    Hakan, Well, I’m interested to know why Europe is a better place. I actually, can see some problems with STEP and PLCS related to customization. It might be, I’m not aware about the flexibility features built-in STEP/PLCS. Can you clarify it, please? Thanks for comments! Oleg

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